Discretionary Trading
Now Reading
Divergent Indices
52

Divergent Indices

by The MoleJune 16, 2017

Yesterday I touched on the increasing intra-day volatility we have been seeing lately, particularly in equities. Momentum and breadth indicators are still pointing upward, however a few early warning lights have started glowing and thus we should take note. But that only tells part of the story, what I find most disconcerting right now are very pronounced divergences between our three major equity indices.

2017-06-16_spoos

Here’s the ES futures which despite running like a hare have been pointing sideways since rolling into the September contract. If you insist on participating here then make sure your anti-depression meds are up to date.

2017-06-16_NQ

Then we have the NQ which previously was leading the pack but then suddenly turned manic depressive and wiped out everyone’s position within earshot. There have been attempts to recover and that double bottom is looking sort of tempting. Then again, why would I want to be long the weakest index?

2017-06-16_YM

And then there’s YM which was in relative sync with the ES but seems to be impervious to whatever is ailing the other two indices right now.

Ergo, if you want to be long then waiting for a little dip in the YM is probably well advised. On the contrary if you think we’re facing the summer of hellfire and damnation then NQ most likely is happy to be your Huckleberry. I may be tempted to actually put up a long on the YM and a short position on the NQ if I see a juicy short term entry opportunity.

2017-06-16_copper_update

Copper was an entry yesterday and it’s looking pretty good thus far. I think an entry here still has good odds as we’re not too far from my original range. If you want to be extra conservative put your stop below 2.52. Also, it’s still early days here and thus I suggest you don’t risk more than 0.25% on this one.

By the way, don’t think I’m phoning it in today as it’s Friday in late spring. I was parsing my charts for over an hour but there are simply no other setups I would touch with a ten foot pole right now. Patience grasshoppers, patience. Unfortunately I don’t make the weather, I just report it 

Speaking of which, it’s hot as hell over here. Time to  take the misses to the beach and show off those ripped abs I have been working on since Christmas. What do you think? See you guys on Monday!


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Tomcat

    Beach is always a good idea. As far as copper goes, to pick up on our interest rate convo the other day. Rising rates are negative for Copper. I have been short for a while now and plan on covering soon since I playing ranges for now, but if FED continues down this path, I can see this printing sub $2s. Good luck.

  • Mark Shinnick

    Yeah, so to the velocity trend we now add Fed’s liquidity contraction so this can get interesting real quick.

  • ridingwaves

    Diviértete en la playa!
    S out of AVXL
    Added L GILD

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • BobbyLow

    Had a great time on vacation. Here is a picture from the top of Grandfather Mountain. https://uploads.disquscdn.com/images/50539b366832d2df6ae15015b41b4b9a4c0f349887b49ad369c688da28688b5b.jpg

  • Mark Shinnick

    GILD, a bellwether trade; super interesting I guess your stop is really tight.

  • BobbyLow

    Here’s a picture of me coming in for a landing on a Zip line. This was a fantastic way for my wife and I to celebrate our 40th Wedding Anniversary. :) https://uploads.disquscdn.com/images/b6d463b896867b9a85459bb1771ee3d041b00dbcf2bd9f88b1ae99eb12d8094b.jpg

  • http://www.captainboom.com/ captainboom

    I’ll bet there are some nice motorcycle roads around there.

  • ridingwaves

    that’s the way to live BL! Get busy living or get busy dying! my mission statement

    congrats on your anniversary…your in top 1% of marriage longevity

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • ridingwaves

    Collecting the 3% yield while it carves this bottom out makes it easy for me…just glad I’m buying it for 1/2 of what top buyers paid….

    the short auto parts symbols on any push higher is an active trade right now…

  • Mark Shinnick

    Long miners, tight.

  • BobbyLow

    We’ve camped (in an RV) in Southern and Central Arizona during the summer and I remember that it was so hot outside that the coolest it ever got inside my RV was 86 degrees with my AC turned to Max. I also remember how easy it was to get dehydrated without realizing it. We still liked being there even with the heat. :)

  • BobbyLow

    Thanks RW. :)

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Yes, there’s nothing like telling the World to go F’itself.

    http://www.wheelingit.us/wp-content/uploads/2011/01/20100418_0421_quartzite-jpg.jpg

    ..now, If I could just afford the RV.
    😉

  • ridingwaves

    guess I should have held out a little longer on that add

  • BobbyLow

    I sold my last bike a while back. There are some great roads to ride around there but I don’t think I would have enjoyed riding the famous Blue Ridge Parkway. The turns are so sharp and so many that I think it would be a case of constantly shifting from 2nd to 3rd gear and back again. There’s no way you can ride it fast unless you have a death wish because if you drift on any given turn there’s often a car appearing suddendly that might be drifting and heading toward you at every turn.

    There was also some really stunning hairpin turns climbing Grandfather Mountain and we saw a full dressed Harley being pulled up a cliff by a wrecker. This was a case where the rider had a problem keeping the bike up riding so slow and put his right foot down while looking down to the right and the 800 lb bike and him went over the cliff. The rider jumped off and was able to hold onto a rock and was OK but the bike was a mess.

  • ridingwaves

    damn snow birds! Their everywhere! at least in the desert during winter…

  • Mark Shinnick

    Well…its still shortterm downtrending but no doubt its around a very critical potential fireworks level.

  • http://www.captainboom.com/ captainboom

    Yeah, untrained and inexperienced riders on that kind of stuff can get in trouble quickly. Sightseeing while riding is a problem. Better to stop and enjoy the view, as the bike will tend to go where you are looking if you are rolling.

    I’d be okay. Been riding since I was 12, and a Motorcycle Safety Foundation RiderCoach for 15 years, teaching the Basic and Advanced courses. I’ve had a number of riding classes, and am due for a track day :-)

    I rode the Dragon (US-129) a few years ago, and that was exactly as you describe. 318 curves in 11 miles. I don’t mind staying in 2nd and 3rd gear, as it’s easy to stay in the power band. It’s a workout riding like that, and I love it.

  • BobbyLow

    I think we’ve talked about the MSF before and I reccomend taking the beginner MSF course to every person thinking about riding a motorcycle. I’ve taken the beginner and advanced courses as well as a two up advanced course. They were all great. I rode two up most of the time and the two up advanced course would have been extremely helpful riding the Blueridge Parkway.

    What untrained and inexperienced riders don’t realize is that almost anyone can ride a motorcycle fast on a straight road. But riding slower while keeping torque to the rear wheel on curved hairpin turns especially two up takes practice and isn’t something that comes naturally.

    There are many things that have stuck with me from my MSF training. One of them is while entering an intercection looking at every vehicle including the ones you can’t see and expecting them to do something stupid. You have to do this almost subconsiously. After about 60,000 miles of riding, it got to the point to where my recoginition of potential danger became too strong and I knew it was time to pack it in.

  • BobbyLow

    Markets running like paint drying so far today. I’m currently nursing a small short miner position (DUST). It’s up a little at this moment but it’ll be gone win, lose or draw by the COB.

  • http://evilspeculator.com Sir Mole III

    What a lovely spot :-)

  • http://evilspeculator.com Sir Mole III

    I’ve got a motorcycle license but if I would do a a trip through the hills with a lot of sharp serpentines I’d probably just take a small scooter style moto. Much more nimble and you get to see the scenery a lot more.

  • http://evilspeculator.com Sir Mole III

    “One of them is while entering an intercection looking at every vehicle including the ones you can’t see and expecting them to do something stupid.”

    Riding a moto here in Valencia this has become an ingrained habit of mine. I constantly expect someone to make a swipe at me or to run a light. Because over here they fucking WILL!

  • http://evilspeculator.com Sir Mole III

    That looks like fun!!!

  • http://evilspeculator.com Sir Mole III

    It was over 95 here today but unlike in Phoenix it’s with humidity. So feels about the same as 105 or more depending on the pressure. I just came home from the gym late at 8:00pm and it’s still 86.

  • http://evilspeculator.com Sir Mole III

    I swear nothing good happens in equities during the summer – and we’re just getting started.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    oh come on.
    You were the trailing stop king. Were you not?

    $33 is guaranteed.
    https://uploads.disquscdn.com/images/0813002efd922b2a53e12d1623c5aa50f4f944453d165fc5bb59d67edcbe3c95.png

    ps. This chart will be on ZeroHedge Tuesday.
    😉

  • BobbyLow

    It was a little scary jumping off for the very first time but we got to do 11 Runs and it was a lot of fun. One thing we had to get used to was braking. For those who have never done this before, we wore gloves that had a very thick palm. My right arm would be over my head and behind my back with that hand on the wire. This helped to keep my body from twisting from side to side. When I needed to slow down I would apply pressure to the wire with the palm of my extended hand.

    The tricky part was not to come in too fast so the instructor wouldn’t have to tackle you or worse apply your hand brake too soon and too hard to end up short of the landing platform and be suspended in mid air. If a person got suspended and couldn’t pull himself in, the instructor would have to go out and throw out a rope to pull you in. I preffered to come in hot. :)

  • BobbyLow

    I’m currently in a “not carrying positions over weekends” mode. Speaking of which with an hour left to go, I just got stopped at Breakeven via a Stop Limit. Because of being away, it was my only trade this week and I didn’t want it to be a loser.

    I now believe in a sworn version of a “Hippocratic Oath” to my trading account which is “First Do No Harm”. :)

    EDIT: I actually had a Target of $33.57 so we’re close. But I’ll have to take another look on Monday now.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    just messin’with ya.

    Congrats on the 40.
    Any advice for a guy just passing 25th?

  • BobbyLow

    Thanks GG.

    If you already have 25, you should have no problem making it to 40 and beyond. :)

    While we were out and about on our vacation we spoke with some young people in their 20’s and were often asked what the secret was to being married for 40 years. My only answer is that it’s a lot easier to stay together when your wife/husband becomes and remains your best friend.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    ok, I’ll confess – that’s pretty nasty. It’s high noon in LA and only 89.

  • ridingwaves

    my dads wife on zipline in CR, they are both in their 70’s, the first line put you over a 500 ft valley and they had a chicken walk in case you couldn’t do it, it caused me to sweat big time..u had to take tram up, this was the 3rd of 7llnes, 7th line goes for 1.25 miles…you hit 50 mph on a couple runs…..
    https://www.youtube.com/watch?v=Sz32MHLeLgs

  • BobbyLow

    Wow that’s awesome! Good for them. And a great job with the film too.

    Funny thing is that there were 12 people in our group and 6 were pretty young while 6 of us were in our 60’s and 70’s. I agree 100% with your mission statement. “Get busy living or get busy dying”.

  • http://www.captainboom.com/ captainboom

    I have *got* to do this. I hit 57 mph on downhill skis this winter, so it’s right up my alley. Any idea what the elevation difference is between top and bottom, and the horizontal distance? Would allow for some speed calculation estimates.

  • http://www.captainboom.com/ captainboom

    Rumor has it Quad Witching *and* SPX rebalancing today. One way to get a green close.

  • http://www.captainboom.com/ captainboom

    Be *very* understanding during menopause.

  • http://www.captainboom.com/ captainboom

    Wise words. The only reason to get married in the first place, IMO, is because that’s your best friend. The friendship will get you over the rough spots.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • BobbyLow

    And this too. :)

  • ridingwaves

    I’m not a fan of heights…my wife went first and there was no way I was going to not go…you had to hold on tight as you would swing and you could also cause momentum degradation thus end up hanging on line waiting for rescue, such as you speak about above, I sided with you and decided to come in hot…I did not want to dangle above the jungle….

  • BobbyLow

    My wife actually talked me into doing this as well. LOL

    I was just thinking about the group we have here at ES. Most of us have something in common regardless of our ages and background, I think we tend to take on challenges that for various reasons a lot of people would not do.

    And to top it all off, we trade the markets which in itself can be kind of crazy but we do it anyway. :)

  • Scott Phillips

    Awesome Bobby!

  • http://evilspeculator.com Sir Mole III

    Horsewash. The main reason to get married is to start a stable family, to have happy children who will be an asset to society.

  • http://www.captainboom.com/ captainboom

    Yeah, ducked in for a bit while I was catching up on emails. Retail tents opening on Thursday, shows lined up and ready to go. One week left to get those internet orders in, so there is time for shipping before the 4th.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    try not to take the dog terrorist guilt too much.
    ..man’s got to make a living.
    😉

    https://scontent.cdninstagram.com/hphotos-xpa1/t51.2885-15/e15/10899188_1593301530921879_1461278543_n.jpg

  • ridingwaves

    man I was hoping for a new post just to get rid of Clyde on this post…the redhead can stay…it’s like an early morning wake up call to do some sit ups…

    lets see if XBI and IBB can finally break out this week

  • ridingwaves

    or the honeymoon…when the moon looks like honey instead of cheese, that’s easy living…

  • http://evilspeculator.com Sir Mole III
  • http://evilspeculator.com Sir Mole III

    Wish granted.